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Leading in the new world of work
• Organizations today must navigate a “new world of work”—one that requires a dramatic change in strategies for leadership, talent, and human resources.
• Networking tools like LinkedIn and Facebook enable people to easily monitor the market for new job opportunities. Details about an organization’s culture are available at the touch of a screen, providing insights about companies to employees and potential employees alike.
• Demographic changes are also in play. Millennials, who now make up more than half the workforce, are taking center stage. Their expectations are vastly different from those of previous generations. They expect accelerated responsibility and paths to leadership.
• For human resources (HR) organizations, this new world requires bold and innovative thinking. It challenges our existing people practices; how we evaluate and manage people and how we engage and develop teams; how we select leaders and how they operate. HR organizations now face increasing demands to measure and monitor the larger organizational culture, simplify the work environment, and redesign work to help people adapt.
• For HR and talent teams, 2015 will be a critical year. As these forces gather momentum, we see 2015 as a time for creativity, bold leadership, and a fundamental reimagining of the practices HR leaders have used for years.
Our global research
• Deloitte’s 2015 Global Human Capital Trends report is one of the largest longitudinal studies of talent, leadership, and HR challenges and readiness around the world. The survey asked business and HR respondents to assess the importance of specific talent challenges facing their organization and to judge how prepared they were to meet these challenges. Using these responses, we calculated a “capability gap” for each challenge, measuring the difference between an issue’s importance and an organization’s readiness to address it.
• In this report, we present 10 major Ethiopia trends that emerged from our research, which reflect four major themes for the year: leading, engaging, reinventing, and reimagining. We also present the capability gaps associated with each of these trends. Besides, we offer practical insights to help you address the challenges in the top five areas in your organization.
Introduction
Be Bold
Ethiopia Human Capital Trends 2015 Leading in the new world of work 3
Survey Demographics
The Ethiopia survey respondents were senior-level managers all the way up to Board level, with 84% of them from Human Resources (HR).
responses were received from
40 companies in Ethiopia
Key trends investigated which are organised into four categories
business and HR leaders took part in the survey
countries submitted results which were captured in the survey
Major industries and regions covered in the survey
47
3,300+
ALL106
10
Ethiopia survey…
Global survey…
4
Ten Major Trends in Ethiopia
The figure below shows respondents’ ratings of the importance of 10 talent challenges alongside their rated readiness to address each challenge. These data highlight substantial capability gaps in all 10 areas.
Based on the survey data, interviews, and secondary research, we will provide more detail on the top five of these challenges and recommendations for how leaders can begin to address them in the next sections.
4
Ten Major Trends in Ethiopia
© 2015 Deloitte Consulting
• The figure below shows respondents’ ratings of the importance of 10 talent challenges alongside their rated
readiness to address each challenge. These data highlight
substantial capability gaps in all 10 areas.
• Based on the survey data, interviews, and secondary
research, we will provide more detail on the top five of
these challenges and recommendations for how leaders
can begin to address them in the next sections.
91
83 8382 82
8078
77
75
73
64
59
53
58
48
54
45 44
48
53
Performancemanagement
Learning &development
Leadership Culture &engagement
ReinventingHR
Simplifyingwork
HR technology HR & peopleanalytics
Global HR &talent
management
Workforcecapability
-27
-24-30 -24
-34-26
-33 -33 -27 -20
Importance indexReadiness indexCapability gap
Capability gap = Readiness Index - Importance Index Key:
Ethiopia Human Capital Trends 2015 Leading in the new world of work 5
Top Five Trends in Ethiopia
How important is the trend to your organisation, and how ready is your organisation to tackle it?
PERFORMANCE MANAGEMENTThe secret ingredientReplace traditional performance management with innovative performance solutions
LEARNING & DEVELOPMENTInto the spotlightExplore new approaches to learning and development to confront increasing skills gaps
LEADERSHIPWhy a perennial issue?Develop leaders at all levels and invest in new and accelerated leadership models
CULTURE & ENGAGEMENTThe naked organizationFocus on culture and improve employee engagement to tackle a looming crisis in engagement and retention
REINVENTING HRAn extreme makeoverAn HR makeover to deliver greater business impact and drive HR and business innovation
Importance:Proportion of Ethiopian respondents rating this trend as ‘Important’ or ‘Very Important’:
Readiness:Proportion of Ethiopian respondents rating that they are NOT ready to tackle the trend:
90%
90%
92%
92%
91%
9%
15%
19%
15%
26%
(Importance index score = 91)
(Importance index score = 83)
(Importance index score = 83)
(Importance index score = 82)
(Importance index score = 82)
Index: Weighted average of importance/readiness scores of all respondents
(Readiness index score = 64)
(Readiness index score = 59)
(Readiness index score = 53)
(Readiness index score = 58)
(Readiness index score = 48)
#1
#2
#3
#4
#5
6
Performance Management:The Secret Ingredient
What can organisations do?• Understand the why of your performance
management process: Understand the business, talent and cultural outcomes your organisation wants to achieve through the performance management process.
• Integrate performance management: HR is expected to bring in performance management into the executive agenda table, revisit the system to align with its purpose, and use the process to provide support in making important talent decisions.
• Revisit the performance management process: Ensure that performance evaluation balances “How” and “What” aspects, and is an ongoing people development instrument. Simplify the process. Build managers’ skills on planning, coaching, communication and rating.
• Link with reward: Performance not linked with reward is unlikely to be repeated. On the other hand, while performance is a major contributor to compensation, it should not be the only input. Skill scarcity and competitive nature of positions, amongst others, should be taken into account.
Questions• What are the purposes of your organisation’s
performance management process?• Why does your organisation’s performance
management lag behind?• What has your organisation done to improve
performance management capability?• How is performance linked with reward in your
organisation?
“Performance management has been there for years. But it won’t be anything if it doesn’t assist in developing people. That is the new imperative.”
Rather than focusing on Measuring and Rating alone, performance management today has the power to orchestrate and drive other HR and talent programs –selection, learning and development, rewards, leadership development, succession management-and hence the power to enhance the contribution people make to business outcomes across the board.
See the Gap
90% of
Ethiopian
respondents rate
performance
management as
‘urgent’ or ‘important’…
…only
38% rate
their
organisations
as being ‘very ready’ to develop it.
But
66%respondents rating
performance management
as one of the five most
important HR agendas in
the short-and-long term.
Rather than focusing on Measuring and Rating alone, performance management today has the
power to orchestrate and drive other HR and talent
programs – selection, learning and development,
rewards, leadership development, succession
management - and hence the power to enhance the
contribution people make to business outcomes
across the board.
37% companies
planning to review
their performance
management
system in the next
18 months.
Ethiopia Human Capital Trends 2015 Leading in the new world of work 7
Learning and Development: Into the spotlight
What can organisations do?• Integrate learning and development with performance
management: Leading companies treat learning and development as a means of filling performance gaps in critical areas.
• Explore alternative methods: Offer high potential employees opportunities for intensive and guided on-the-job training to enable them for higher responsibilities. You should take the time to familiarize yourself with all the new online content options and make sure you are leveraging them in your total training solution.
• Introduce competency based talent management: Shift from task based to competency based talent management: focus on implementing an integrated talent management program that centres around systematically identified critical competence areas for core positions.
• Measure return on investment for your learning and development initiatives: Introduce a robust measurement for your learning and development initiatives. Focus investment on learning and development to areas that have the biggest impact.
Questions• Does your organisation has formal training and development
programs with ongoing budgets and activities?• How do you prioritise learning and development initiatives?• What are the common learning and development methods used in
your organisation and how effective are they?• How do you evaluate the effectiveness of your organisation’s
learning and development programs?
90% of Ethiopian
companies believe
that learning and
development to fill
skill gaps is
“Important” or “Very Important”
Ethiopian respondents
consider learning and
development their
organisations’ second most important
challenge both in the
short-and long-term.
62%
W e a k
30%
A d e q u a t e
48%
E x c e l l e n t
13%
W e a k
43%
A d e q u a t e
35%
E x c e l l e n t
13%
…Developing a culture of
apprenticeship and on-the-job
training
…Efficiently managing L&D operations
W e a k
35%
A d e q u a t e
35%4%
…Providing mobile and social
learning
How did respondents rate their organisations on….
W e a k
48%9%
…Using advanced
media (gaming, video,
simulation)
n/a
9%
n/a
9%
n/a
26%
n/a
43%
3rd most important
trend globally.
Respondents who said that
their organisations are not
ready for the challenge.
15%
n/a – Not applicable
8
LeadershipWhy a perennial issue?
What can organisations do?• Engage top executives to develop leadership
strategy and actively govern leadership development: provide them with visibility and solicit their input on leadership pipeline, gaps and programmes.
• Link to business goals: Align and refresh leadership strategies and development to evolving business goals: growth, innovation, quality, new markets and acquisitions require different combinations of leadership experiences and capabilities.
• Develop leaders internally: The trend for searching ready made leaders is over: high performing companies build local leaders from the ground up. For this to happen; first have a leadership framework, select high potentials, assess their developmental needs and design and execute impactful on-the-job learning and coaching programs.
• Awareness of leadership archetypes e.g. Entrepreneurs who can start a business, Scale Leaders who can build up a business, Efficiency Leaders who can reduce costs and improve operations, Fix-It leaders who can turn businesses around.
• Focus on the top leadership skills that are in high demand in your organisation
Questions• Has the importance of leadership grown in your
organisation? If so why?• Do you take different approaches for developing
leaders at different levels?• What do you view as the most critical leadership
skills in your organisation?• How can leaders be developed internally for higher
level positions?
“Companies are run by first line supervisors and middle management –organisations should target multiple generations of leaders –developing leaders at all levels of the organisation and not just at the top”
Many companies are not investing enough in this area. Companies at Level 4 Maturity in Deloitte model spend 50 percent to 75 percent more on leadership development than their peers, and they see three to four times higher levels of engagement and performance from such programs.
#2 global talent issue
60% of organisations in Ethiopia rate
leadership issues ‘Very Important’
26%of respondents say they are
ready for developing leaders at
all levels – the 4th largest
Only
readiness gapin our survey
No shortcuts to development:
18 Monthsneeded before a new leader feels fully
comfortable in a new role.
24-36 Monthsneeded before a mid-level leader feels fully
comfortable in a new role. <10%Organisations that have
programs to develop
Millennial leaders
#3 most important trend in
Ethiopia.
Many companies are not investing enough in this
area. Companies at Level 4 Maturity in Deloitte
model spend 50 percent to 75 percent more on
leadership development than their peers, and they
see three to four times higher levels of engagement
and performance from such programs.
of organizations
have little or no
leadership
development
programs at all.
50%Organisations with
leadership
development
programs who rate the
programs “weak.”
52%
Ethiopia Human Capital Trends 2015 Leading in the new world of work 9
Culture and engagement:The naked organisation
92% of Ethiopian
respondents
believe that
culture and
engagement are
“Important” or “Very Important”
Ethiopian respondents
who considered their
organisations “Ready” or “Very ready” in terms of culture and engagement.
88%
13% of global
workforce
is highly
engaged.
Employees
(global) who
would
recommend
their employers
to their friends.
50%
How much does culture matter?For example, in one study (global) over a 10-year
period, companies that intentionally managed their
cultures outperformed similar companies that did not:
Revenue
growth
Stock price
Increase
Net income
growth
Job growth
68.2 %
90.1%
28.2%
75.6%
Vs 16.6%
Vs 7.4%
Vs 3.6%
Vs 0.1%
34%
53%
13%
Good – we have a well understood culture with
documented artifacts but there are areas of
misalignment which we would like to improve
Fair – our culture is not clear and consistent and
in some places it presents problems in
engagement, performance, and retention
Poor – generally our culture is misaligned and
we need to focus on defining and improving our
leadership and management culture
Understanding and focus on culture as a strategy for performance and talent
management among Ethiopian organisations
#1 global
talent issue
What can organisations do?• Map your cultural landscape: Understanding the prevailing
culture starts you on the path of culture management. Focus your assessment on major culture orientations.
• Align your culture with your strategy: You have to be explicit and clear about the purpose of your organisation’s culture. Define the desired values and aspirations in line with your purpose. Translate these values and aspirations into real behaviours that provide for role clarity and accountability. You can make your organisation’s culture a source of competitive advantage that is difficult to imitate.
• Start managing your culture seriously: Culture is something that you can manage. Begin by working on the visible processes, systems and behaviours that shape your organisation’s culture.
• Make engagement central to talent management: Consider
employee engagement a central part of every HR program today—how you hire, how you manage, and how your organization works. Work around the five main elements of engagement: meaningful work, great management, fantastic environment, growth opportunity, trust in leadership.
Questions• Does your organisation take culture and employee engagement as
serious issues to be managed?• What does the culture of your organisation look like?• What does your organisation’s leadership do to understand
employees’ sentiments and job satisfaction?• Does your organisation’s culture positively support your
organisation’s strategy?
10
Reinventing HR:An extreme makeover
What can organisations do?• Design the HR organization to deliver solutions: For many
businesses, it is time to redesign HR with a focus on consulting and service delivery, not just efficiency of administration. HR business partners must become trusted business advisors with the requisite skills to analyze, consult, and resolve critical business issues.
• Develop the HR function expertise: HR professionals at all levels need continuous professional development.
• HR maturity assessment and improvement roadmap: Consider assessing the maturity of your HR function and developing an integrated roadmap for improvement.
• Create business-integrated “networks of excellence.” Rather than locating HR specialists in central teams, embed them into the business—but coordinate them by building a strong network of expertise. Recruitment, development, employee relations, and coaching are all strategic programs that should be centrally coordinated but locally implemented. When specialists in these areas live and work close to the business, their impact is greatly enhanced.
Questions• What are the defining roles of HR in your organisation today?• What has your organisation done to improve the HR function’s
capability?• In general, how mature is the HR function in your organisation?• How is the HR function organised in your organisation and what
are its roles in supporting business leaders in HR matters?
92% of Ethiopian respondents rate
reinventing HR ‘important’ or ‘very important’…
26% respondents said
their organisations
are not ready for
the challenge.
4th highest
capability
deficiency
area.
Is HR really capable and ready for the needs of the business?
Recent research (Bersin by Deloitte 2014) on business leaders’ confidence on HR around the world shows that only:
30% believe that HR has a
reputation for sound
business decisions.
28% feel that
HR is highly
efficient.
20% feel that HR can
adequately plan for the
company’s future talent needs.
22% believe that HR
is adapting to the
changing needs of
their workforce.
Ethiopia Human Capital Trends 2015 Leading in the new world of work 11
Contacts
For the global human capital trends please see: www.deloitte.com/hctrends2015
Solomon Gizaw:Managing Partner/Country [email protected]: +251(0)115522779Mob: +251(0)911225597
Kemal M Rashid:Director -Human [email protected]: +251(0)115522779Mob: +251(0)912502755
About this publicationThis publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or its and their affiliates are, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.None of Deloitte Touche Tohmatsu Limited, its member firms, or its and their respective affiliates shall be responsible for any loss whatsoever sustained by any person who relies on this publication.
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